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allochka39001 [22]
1 year ago
5

On March 25, 2021, Phillips Corporation purchased bonds of Atlas Corporation for $132 million and classified the securities as t

rading securities. On December 31, 2021, these bonds were valued at $150 million. Three months later, on April 3, 2022, Phillips Corporation sold these bonds for $140 million. As part of the multi-step approach to record the 2019 transaction, Phillips Corporation should first update the fair value adjustment by recording:
Multiple Choice

An unrealized holding gain of $28 million in 2019.

A unrealized holding loss of $10 million in 2019.

An unrealized holding gain of $8 million in 2019.

A gain of $8 million in 2019.
Business
1 answer:
ValentinkaMS [17]1 year ago
4 0

Answer:

An unrealized holding gain of $28 million in 2019.

Explanation:

At the financial year-end, the company have to reevaluate the investment to recognize the gain or loss.  

If the fair value is higher than actual investment, the company gain and vice versa it lost.

In this scenario, the fair value adjustment = the valuation on 31st December – purchased value = $150 million - $132 million = $28 million.

Because this step is just an approach to record new valuation of investment, then it’s consider unrealized.

In short, Phillips Corporation should first update the fair value adjustment of $28 million on December 31 2021

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C perception, reaction, braking
3 0
1 year ago
You bought one of Great White Shark Repellant Co.’s 8 percent coupon bonds one year ago for $1,044. These bonds make annual paym
GalinKa [24]

Answer:

17.4%

Explanation:

original purchase price 1 year ago = $1,044

current market price:

0.06 = {80 + [(1,000 - MV)/13]} /  [(1,000 + MV)/2]

0.06 x [(1,000 + MV)/2] = 80 + [(1,000 - MV)/13]

0.06 x (500 + 0.5MV) = 80 + 76.92 - 0.0769MV

30 + 0.03MV = 156.92 - 0.0769MV

0.1069MV = 126.92

MV = 126.92 / 0.1069 = $1,187.28

total returns during the year = $80 (coupon) + ($1,187.28 - $1,044) = $223.28

nominal return on investment = $223.28 / $1,044 = 21.387%

real return on investment = [(1 + i) / (1 + inflation)] - 1 = [(1 + 0.21387) / (1 + 0.034)] - 1 = 1.174 - 1 = 0.174 = 17.4%

4 0
2 years ago
The market interest rate related to a bond is also called the a.stated interest rate b.contract interest rate c.effective intere
never [62]

Answer:

The market interest rate related to a bond is also called the

c.effective interest rate.

Explanation:

Another name for the market interest rate is the current interest rate, the yield-to-maturity, or the effective interest rate.  One distinguishing factor is that the market interest rate is always changing whereas the stated interest rate does not change.  The stated interest rate is the interest rate  actually designated on the face of a bond, which determines the amount of interest that the bondholder receives. This means that the market interest rate is just the rate that investors demand to earn for lending their money to the company.

4 0
1 year ago
A company is considering purchasing a machine that costs $232000 and is estimated to have no salvage value at the end of its 8-y
Inessa05 [86]

Answer:

45.69%

Explanation:

The formula to compute the accounting rate of return is shown below:

= Annual net income ÷ average investment

where,  

Net income is

= Annual revenues - annual operating expenses

= $120,000 - ($38,000 + $232,000 ÷ 8 year)

= $120,000 - ($38,000 + $29,000)

= $53,000

And, the average investment would be

= (Initial investment) ÷ 2

= ($232,000) ÷ 2

= $116,000

Now put these values to the above formula  

So, the rate would equal to

= $53,000 ÷ $116,000

= 45.69%

7 0
1 year ago
Human Resources Manager, Claire must inform Anthony that company job changes will require him to seek retraining or lose his pos
crimeas [40]

Answer:

a. a face-to-face conversation.

Explanation:

According to my research on human resources procedures, I can say that based on the information provided within the question the best way for Claire to deliver this message would be through a face-to-face conversation. This is because any news important news regarding to or affecting an individuals job should be delivered in person in order for the individual to ask questions and not misinterpret the information, as well as provide some peace of mind by providing answers to any questions they may have.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

7 0
2 years ago
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